House committee won't vote on Insure Missouri until hospitals sign off on regulation changes

JEFFERSON CITY — Gov. Matt Blunt’s Insure Missouri plan for expanding government-funded health care has become a hostage in a fight about government regulation of medical facility expansion.

Despite its 30-4 passage in the Senate, Insure Missouri is lingering in a House committee as the committee’s chair — Rep. Rob Schaaf, R-St. Joseph — refuses to bring the bill to the floor until the Missouri Hospital Association accepts changes in the “Certificate of Need” law, a state law that regulates construction and expansion of medical facilities.

Certificate of Need laws became popular in the 1970s as a way to keep existing hospitals from expanding more than necessary and to restrict new hospitals from being built. Under the law, a medical facility must get approval from the government for any major expansion project. The concept was that construction of unneeded medical facilities or addition of costly equipment contributed to rising health care costs.

Many states, however, have scrapped these Certificate of Need laws or heavily restricted them. Under Schaaf’s bill, the Certificate of Need law would apply only to long-term care facilities such as nursing homes — leaving general hospitals and private hospitals free to expand or add facilities, beds and machines.

Schaaf argues the expanded competition would lower costs.

“Before we spend over $400 million on Insure Missouri, we need to pay back taxpayers through lower costs and increased competition,” Schaaf said.

But the hospital association argues there is no connection between Insure Missouri and Certificate of Need requirements.

“Insure Missouri is not linked to (Certificate of Need) except where Schaaf links it. If you take Certificate of Need reform to the General Assembly, it won’t pass,” said Dave Dillon, a spokesperson for the hospital association.

Dillon said scrapping Certificate of Need laws would inhibit a hospital’s ability to provide unprofitable services. Once Certificate of Need laws are scrapped, he said, newly created specialized medical facilities could attract patients away from general hospitals.

Philip Peters, a law professor at MU who specializes in health law, provided the following scenario: There is a general hospital in an urban area that provides services to the urban and suburban community. If Certificate of Need requirements are eased, a private hospital could open in the suburban area and treat those in the suburban community. The urban hospital, no longer receiving money from suburbanites who are most likely insured, would not have the money to provide services for the uninsured and might have to close.

“Hospitals frequently are able to supply services to the uninsured because of the revenue they get from the insured,” Peters said. He added that private hospitals and specialty centers are able to cherry-pick which services they want to provide and to whom they provide them. Frequently, this means providing profitable services to people who can afford them.

But it’s the revenue from the insured that Schaaf said he has a problem with.

“It’s the duty of the government to take care of people who can’t take care of themselves,” said Schaaf, saying that asking taxpayers to pay for able-bodied people is like slavery.

“Slavery is when you make one person labor for the benefit of another,” Schaaf said. “I’m not going to enslave the taxpayer for another $400 million without the benefit of lower premiums for everyone.”

But Peters said increased competition doesn’t guarantee lower prices, especially when doctors need to pay for all the equipment they’ve added to their offices.

“I don’t think doctors intentionally run up the cost of services, but when more tests are available, and they’re owned by that facility, doctors tend to prescribe more tests,” Peters said. “It’s human nature.”

One argument about the Certificate of Need process has been how well it actually stops expansion or construction.

Dillon said if any type of health care facility wants to provide a service that’s truly needed, it will be approved.

But Peters sees the whole process as a game. Currently, companies hire lawyers and spend lots of money on the whole process that is oftentimes approved.

“Why play the game?” Peters asked. “To remove it will take out the waste of time and money.”

The hospital association said it is supportive of Insure Missouri and wants to see it pass.

“He’s using Insure Missouri to drag it out,” Dillon said of Schaaf. “Fundamentally changing hospitals completely is not an acceptable compromise. He’s just doing this because he knows his bill won’t pass on its own.”

Dillon said the association has no plans to negotiate with Schaaf but said he is sad to see this happen to a bill that had worked so hard to build compromise and consensus.

Schaaf still has no plans to bring Insure Missouri to the floor, and with two weeks left in session, getting the bill passed is unlikely.

Tom Dempsey, R-St. Charles County, the bill’s Senate sponsor, said, “It’s frustrating to put so much time into something and not get it done, but that’s the process.”

Dempsey said he feels good about the bill that he sent to the House, “If I thought (Certificate of Need) was supposed to be part of the bill, I would’ve put it in there,” he said.